Understand leasehold in Bali
Foreigners can’t buy freehold property in Bali, as only Indonesian nationals have the right to do so. This means foreigners must buy property another way, such as through leasehold. Villa leaseholds in Bali are long-term rental agreements, mostly valid for 25 or 30 years and extendable up to 80 years. With a leasehold agreement, foreigners can legally own property in Bali for a certain period.
Another way foreigners can buy property in Bali is through a PT PMA. This is a foreign-owned company that lets foreigners purchase freehold land in Bali. Many foreigners establish a PT PMA in Bali and still opt for Bali villas for lease, as leasing property in Bali has many benefits:
- Leasing a villa or land in Bali is usually cheaper than buying with a freehold.
- The tenant can use the property almost as if they own it, as they can make improvements, rent it out, or use it for business purposes (as long as the lease agreement allows them to do so).
- Obtaining certificates such as Hak Pakai (HP) or Hak Guna Bangunan (HGB) is unnecessary when leasing a villa in Bali.
- The tenant only pays a one-time 11% Lease Tax (at the moment of the transaction) and doesn’t have to pay the annual Land and Building Tax (PBB).
Before looking for Bali leasehold villas for sale and signing a lease agreement in Bali, ensure you understand the laws and regulations for Bali leasehold villas for sale, especially when buying them as an investment to generate rental income with Bali leasehold villas for sale.
How to find Bali leasehold villas for sale?
Finding Bali leasehold villas for sale requires research, networking, and professional help. Whether you are looking to buy villas in Bali for personal use or as an investment property for renting out, consider engaging legal support to ensure a smooth and secure transaction. There are several ways to find Bali leasehold villas for sale.
1. Property marketplaces
You find many Bali villas for lease on many real estate agency platforms. Besides Bali leasehold villas, you also find freehold land and property on these platforms.
2. Direct listing by owners
Searching for Bali real estate for sale by owner can sometimes result in direct listings from property owners looking to lease their villas. This method may allow you to negotiate directly with the owner and potentially secure a more favorable deal, especially if you’re looking for a long-term lease.
3. Local network
Using a local network is an excellent way to find villas for sale in Bali. Engage with locals, expats, or friends who might have insights into Bali’s real estate market. Often, word-of-mouth referrals can lead you to great deals, especially in sought-after areas such as Canggu, Kuta, Legian, Pererenan, or Uluwatu. Joining community forums and social media groups focusing on Bali properties can also help you tap into the local network.
4. Bali real estate agency
Hiring a real estate agent is one of the most efficient ways to find Bali leasehold villas for sale. Look for agents who specialize in Bali properties, particularly in leasehold agreements. A good agent can guide you through the entire process, from finding Bali leasehold villas for sale that suit your preferences to negotiating the lease terms. Moreover, depending on your budget, they can provide options ranging from cheap to modern villas in Bali. Real estate agents usually have an extensive portfolio of properties, including Bali villas for rent, and have insights into market trends and legal requirements.
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How much is it to lease a villa in Bali?
The price of Bali leasehold villas for sale depends on several factors, such as location, style, used materials, and facilities. The average price of a villa in Bali is IDR 14.5 million ($914) per square meter, while the average rent price is IDR 84 million ($5,292) per year. The gross rental yield on villas in Bali is 43.4%.
How to buy a leasehold property in Bali?
Are you seeking Bali leasehold villas for sale? Follow these nine steps to buy a leasehold property in Bali.
Step 1: Research the Bali leasehold property market
Start by researching the Bali real estate market by focusing on ‘Bali leasehold villas for sale’ or ‘Bali villas for sale leasehold’. Note the difference between ‘leasehold property’ and ‘freehold property’. Keep an eye on areas close to Seminyak, Legian, Canggu, and other popular locations, such as villas for sale in Ubud.
Step 2: Understand leasehold ownership
Ensure you understand the regulations for Bali leasehold property. In Bali, a leasehold means you don’t own the land but have the right to use it for a defined period. Compare this with freehold villas for sale in Bali to understand the differences.
Step 3: Set your budget
Understand how much it costs to buy a villa in Bali under leasehold. Research the average prices and decide your budget. Considering the cost of leasing a villa in Bali is especially important when planning to rent one.
Step 4: Work with a Bali real estate agency
Find a reliable real estate agent specializing in ‘Bali real estate for sale by owner’ or leasehold properties. Look for listings like ‘modern villa Bali for sale’ or ‘Seminyak villas for sale’.
Step 5: Search for Bali villas for lease
Choose a property that suits your needs. There are many Bali leasehold villas for Sale, so if you’re considering renting a villa, explore the rental market. Visit the Bali leasehold villas for sale in person and inspect them carefully before buying.
Step 6: Perform due diligence and negotiate the terms
Engage a legal advisor to conduct due diligence on the chosen property. Ensure the lease agreement is clearly outlined and negotiate terms, including possible extensions.
Step 7: Complete the transaction
After searching through different Bali villas for lease and finding the right one, you can proceed with the transaction. Once you’re satisfied with the terms, you pay the agreed amount. Ensure that all legal documents are legal.
Step 8: Consider building improvements
If you’re interested in customizing the property, research how to build a villa in Bali to improve the building. Ensure that any improvements comply with local regulations, so working with a reputable agent is advisable.
Step 9: List your Bali villa on booking platforms
To earn rental income, list your villa in Bali for rent on booking platforms such as Airbnb or Booking.com. Focus on marketing strategies to attract tenants.
Remember, buying a villa in Bali as a foreigner can be complex. Follow local regulations and work with a reputable Bali real estate agency and legal advisors to safeguard your investment.
Valuable insights and practical advice, distilled from years of expertise and real-world experience.
Frequently Asked Questions (FAQs)
What is a leasehold property in Bali?
A leasehold property in Bali is real estate where you don’t own the land but have the right to use it for a specified period, usually over decades. This is popular among foreigners in Bali as full ownership, known as freehold, is not permitted for them. With a leasehold, you can even rent out the property; for instance, a leasehold villa in Bali can be used for rental purposes.
How to find Bali leasehold villas for sale?
You can use online real estate platforms to find Bali leasehold villas for sale. Additionally, engage reputable real estate agents specializing in Bali leasehold properties, particularly in hotspots like Ubud, Seminyak, Canggu, and Ubud. They can provide invaluable insights and help in finding the ideal leasehold villa.
How to buy a Bali villa for lease?
Buying a Bali leasehold villa involves several steps. First, research Bali leasehold villas for sale to find the villa that meets all your requirements and wishes. Engage a reputable real estate agent and legal advisor, conduct due diligence, and negotiate terms to complete the transaction.
Can you sell a leasehold property in Bali?
Yes, you can sell a leasehold property in Bali. However, it’s essential to note that the buyer will only purchase the remaining lease period. Engage a reputable real estate agent familiar with Bali properties to help market and sell the property. It’s crucial to have all the legal paperwork in order and clearly outline the leasehold terms in the sale agreement.
How much does it cost to buy a villa in Bali?
The cost to buy a villa in Bali varies widely based on factors such as location, size, and type of property. Prices for a modest villa in less popular areas might start around IDR 100,000 ($6.30), while luxurious villas in prime locations like Seminyak or Canggu can go for over IDR 1 million ($63). It’s also important to consider ongoing costs such as maintenance and fees if it’s a leasehold property.
Can foreigners buy Bali villas through leasehold?
Foreigners can buy a villa in Bali through a leasehold, as Indonesian law allows foreigners to do so. However, foreigners can’t buy freehold villas unless they do so through a PT PMA.
